Main menu

You are here

Renouncing America

More shed U.S. citizenship but deny stereotype.

Associated Press

Apr 27, 2014

Inside the long-awaited package, six pages of government paperwork dryly affirmed Carol Tapanila's anxious request. But when Tapanila slipped the contents from the brown envelope, she saw there was something more.

"We the people...." declared the script inside her U.S. passport — now with four holes punched through it from cover to cover. Her departure from life as an American was stamped final on the same page: "Bearer Expatriated Self."

With the envelope's arrival, Tapanila, a native of upstate New York who has lived in Canada since 1969, joined a largely overlooked surge of Americans rejecting what is, to millions, a highly sought prize: U.S. citizenship. Last year, the U.S. government reported a record 2,999 people renounced citizenship or terminated permanent residency; most are widely assumed to be driven by a desire to avoid paying taxes on hidden wealth.

The reality, though, is more complicated. The government's pursuit of tax evaders among Americans living abroad is indeed driving the jump in abandoned citizenship, experts say. But renouncers — whose ranks have swelled more than five-fold from a decade ago — often contradict the stereotype of the financial scoundrel. Many are from very ordinary economic circumstances.

Some call themselves "accidental Americans," who recall little of life in the U.S., but long ago happened to be born in it. Others say they renounced because of politics, family or personal identity. Some say signing away citizenship was a huge relief. Others recall being sickened by the decision.

At the U.S. consulate in Geneva, "I talked to a man who explained to me that I could never, ever get my nationality back," says Donna-Lane Nelson, whose Boston accent lingers though she's lived in Switzerland 24 years. "It felt like a divorce. It felt like a death. I took the second oath and I left the consulate and I threw up."

When Americans do hear about compatriots rejecting citizenship, it's more often people keeping their U.S. citizenship and dropping that of another country.

Last year, Texas Sen. Ted Cruz acknowledged the Canadian citizenship he was born to, but said he would renounce it. In 2012, Rep. Michele Bachmann, R-Minnesota, saying she was "100 percent committed to our United States Constitution," announced she was giving up Swiss citizenship gained through marriage.

One of the few times rejected U.S. citizenship has gotten significant ink was Facebook co-founder Eduardo Saverin's 2011 decision to turn in his American passport after moving to Singapore. Saverin likely avoided millions of dollars in taxes by doing so shortly before Facebook's initial stock offering.

Other wealthy Americans also have relinquished U.S. citizenship. Denise Rich, the ex-wife of pardoned trader Marc Rich, expatriated in 2012 and lives in London. Last fall, singer Tina Turner, a resident of Switzerland since 1995, relinquished her U.S. passport.

But Saverin's decision, in particular, hit a political nerve, along with scandals surrounding UBS and Credit Suisse, which were caught matching wealthy Americans with offshore accounts.

In recent years, federal officials have stepped up pursuit of potential tax evaders, using the Foreign Account Tax Compliance Act which requires that Americans overseas report assets to the IRS or pay stiff penalties. Those trying to comply complain of costly fees for accountants and lawyers, having to report the income of non-American spouses, and decisions by some European banks to close accounts of U.S. citizens or deny them loans.

But some of those surrendering citizenship say their reasons are as much about life as about taxes, particularly since the U.S. government does not tax Americans abroad on their first $96,600 in yearly income.

Decisions to renounce "are driven by a whole range of emotional considerations. ... You've got anger, you've got fear, you've got a strong sense of indignation," said John Richardson, a Toronto lawyer who advises people on expatriation. "For many of these people, this is not a tax issue at all."

Even some who acknowledge tax worries say decisions to renounce are far more complicated than a simple desire to avoid paying.

Peter Dunn, born in Chicago and raised in Alaska, moved to Canada to pursue a graduate degree in theology. He met his wife, Catherine, and they made Toronto home when her work as one of the owners of an aviation maintenance firm made her the breadwinner.

Dunn remained an American. But he was alarmed by a change in U.S. law requiring those with more than $2 million in assets to pay an exit tax if they gave up citizenship. He didn't have $2 million. But his wife was doing well enough that he imagined one day they could get there. The idea of the U.S. government taxing his Canadian wife's money didn't seem right.

"When I learned about that, I decided that to protect my wife, I better expatriate," he says.

Corine Mauch arrived at the same decision by a different route. Mauch was born a U.S. citizen to Swiss parents who were college students in Iowa. They lived in the U.S. until she was 5, then again for two more years before she turned 11. Mauch maintained dual citizenship even after she was elected to Zurich's city council. But when she became mayor, she reconsidered.

During the last American presidential election, "I asked myself 'Where do I feel at home?' And the answer is clear: In Zurich and in Switzerland. My attachment to America is limited to my very early youth," Mauch said. Double taxation was "not the crucial factor for my decision. But I will not miss the U.S. tax bureaucracy either."

Taxes play little or no role in other decisions.

Norman Heinrichs-Gale's parents were missionaries from Washington state who raised him in Asia and the Middle East. In 1986, he traveled to Austria with his American wife, and they found work at a conference center in an alpine valley town of 6,000. The jobs were supposed to last a year. But the couple stayed, sending their children to local schools.

On yearly trips to the U.S. he felt increasingly like a stranger. "I never forget going into a grocery store and just being stunned by my choice of cereals," Heinrichs-Gale says. "I was stunned by just the pace of life compared to what we have here, stunned by the extremes of wealth and poverty that I encountered."

There wasn't one single thing that pushed him away. But his children wanted to attend Austrian colleges and he and his wife wanted to vote in the country they considered home. The family was tired of renewing visas and work permits. And so they signed documents giving up U.S. citizenship. Now, one of the last vestiges of American culture in their home is watching Seattle Seahawks games online.

Sports played the central role in Quincy Davis III's decision. Davis, raised in Los Angeles and Mobile, Ala., played professional basketball in Europe after three years as Tulane University's leading scorer. By 2011, he was home studying to become a firefighter when he was offered a spot on a Taiwanese pro squad. He's since helped lead the Pure Youth Construction team to two championships.

When the team's owner suggested last year that he join Taiwan's national team, Davis says he found little motivation to keep his U.S. citizenship.

"When you think about who I am as a black guy in the U.S., I didn't have opportunities," he says. "You get discriminated against over there in the South. Here everyone is so nice. They invite you into their homes, they're so hospitable. ... There's no crime, no guns. I can't help but love this place."

Many others cutting their U.S. ties say tax laws drive decisions that have nothing to do with secreting wealth.

"I wish I were wealthy," said Nelson, who says she takes in about $50,000 a year from pensions and earnings from publishing an online journal covering credit union news.

Nelson has vivid memories of growing up in the U.S. Even after moving to Europe, she continued sending five to 10 emails a week to members of Congress, opposing the Iraq war and the Patriot Act. After 15 years, she acquired Swiss citizenship so she could vote. But she began considering expatriation only in 2010 after a banker told her that, because of new U.S. financial reporting laws, it was closing the accounts of many Americans and a mistake as minor as an overdraft could mean the same for hers.

"How would my clients pay me?" says Nelson, who is 71 and also an author of mystery novels. "Where does my Social Security get deposited? Where does my pension get deposited?"

The jump in renunciations reflects evolving views about national identity, said Nancy L. Green, an American professor at the L'Ecole des Hautes Etudes en Sciences Sociales in Paris. When the U.S. got its start, citizenship was defined by "perpetual allegiance" — the British notion of nationality as a birthright that could never be changed.

American colonists rejected that to justify becoming citizens of a newly independent country. But changeable citizenship wasn't widely embraced until the mass immigration of the late 1800s, says Green, a historian of migration and expatriation.

Even then, U.S. artists and writers who moved to Europe in the 1920s were criticized, suspected of trying to avoid taxes. Until the 1960s, U.S. citizenship remained a privilege the government could take away on certain grounds. It's only since then that U.S. citizenship has come to be viewed as belonging to an individual, who could keep — or surrender it — by choice.

But Carol Tapanila's life in Canada has tested that redefinition.

Six years after Tapanila's husband lost his job at a Boeing factory in Washington state and they moved to Canada for work, the couple became citizens of their new country. She says U.S. consular officials told her that, by swearing allegiance to Canada, she might well have lost her American citizenship.

After retiring from a job as an administrative assistant at an oil company in Calgary, Tapanila began putting $125 a month into a special savings account for her developmentally disabled son, matched by the Canadian government. In her will, she authorized creation of a trust fund to draw on retirement savings and other assets to provide for her son, who is now 40, after her death.

Tapanila says she didn't know she was required to file U.S. tax returns until 2007, when her daughter raised the subject. Her troubles were compounded by her decision to apply for a U.S. passport after a border officer told her she should have one. She has since spent $42,000 on fees for lawyers and accountants and paid about $2,000 in U.S. taxes, including on funds in her son's disability savings account.

In 2012 she turned in the passport, renouncing U.S. citizenship to protect money saved for her retirement and her son. Tapanila, 70, has tried and failed to renounce U.S. citizenship on his behalf, saying officials told her such a decision must be made by the individual alone.

"You know, we are not rich people and we are not tax evaders and we are not traitors and I'm more than tired of being labeled that way," Tapanila says.

"I'm sorry that I've given my son this burden and I can do nothing about it ... I thought we had some rights to go wherever we wanted to go and some choices we could make in our lives. I thought that was democracy. Apparently, I've got it all wrong."

Comments

worddrow811

Sun, 04/27/2014 - 10:26am

It seems to me that if our American law-makers were not about grabbing other people's money for their own purposes, this would not be an issue. We should be able, as human beings, to choose where we live our lives as long as we are not criminals, which our elected officials usually become.

Pterocarya frax...

Sun, 04/27/2014 - 10:38am

"We should be able, as human beings, to choose where we live our lives"

A lot of hispanics have been thinking the same thing when they crossed the border.

Donegan

Sun, 04/27/2014 - 12:25pm

You support those who will not even follow our laws yet support a government who does nothing but pass more laws that only its own citizens should follow? Get real. You liberals are a bunch of control freaks who put on a pretty face to stir up new voters for your agenda which is nothing more than to oppress those who reside here in the US.

WeThePeople1965

Sun, 04/27/2014 - 6:07pm

Agenda... Like Agenda 21?

Donegan

Sun, 04/27/2014 - 6:53pm

More of a agenda of dependency. The liberal agenda always ends up as a centralized government that controls the citizens instead of what this country is supposed to be which is "For the people and by the people".
The Liberals forget their god is my public SERVANT, as in he is supposed to serve the people interest. Not grabbing power for the government.

rbenn

Mon, 04/28/2014 - 10:49am

Food For Thought: Conundrum - Aaah! Keeping The Confused, Confused.
The definition of the word Conundrum is: something that is puzzling or confusing.
Here are six Conundrums of socialism in the United States of America:
1. America is capitalist and greedy - yet half of the population is subsidized.
2. Half of the population is subsidized - yet they think they are victims.
3. They think they are victims - yet their representatives run the government.
4. Their representatives run the government - yet the poor keep getting poorer.
5. The poor keep getting poorer - yet they have things that people in other countries only dream about.
6. They have things that people in other countries only dream about - yet they want America to be like those other countries.
Think about it! And that, my friends, pretty much sums up the USA in the 21st Century. – Author Unknown

grumpy

Sun, 04/27/2014 - 12:29pm

Seems to me that as long as they obey the laws of whatever land they wish to live in... they are allowed to do so. Do you disagree with that? I know of no country that wants lawbreakers to come into their country and settle there... do you know of any who want lawbreakers to settle there?

The Big Dog's back

Sun, 04/27/2014 - 1:03pm

Here ya go right wingnuts, America, Love it or LEAVE it.

rbenn

Sun, 04/27/2014 - 1:30pm

Same old stupid comments from doggy doo

Donegan

Sun, 04/27/2014 - 1:34pm

Dog if you love this country so much why do you want to change it? You do know there are ready made countries on the other side of the world that are already communist, Have the camps for those that disagree and can tell you every single move you should make so you do not have to think? Maybe you should think about relocating and leave those who want our freedom alone.

The Big Dog's back

Sun, 04/27/2014 - 3:45pm

Change it back to Representative Democracy, like the founders intended, not a Gov for the rich, by the rich.

Donegan

Sun, 04/27/2014 - 3:52pm

It was intended to be a Representative Republic, not a dictatorship like you want. A Representative Democracy would just give you morons more power to undermine common sense and the constitution. How come i never hear you complaining about Soros, the unions or the billion dollars Your god brags about raising?
I personally believe money should be removed from the equation and that would include the millions your god received from wall street in 2008. But then again i am not a hypocrite.

The Big Dog's back

Sun, 04/27/2014 - 3:58pm

I believe money should be out too, but your Oligarchs on the Supreme Court think different.

His point is, in his narrow minded beliefs, is that SCOTUS is good when it does what he wants and rightwing owned when it doesn't. It comes from having a narrow view of life. All is black or white, what he doesn't want and what he does want. It is all D or R. He is a wholly owned subsidiary of his party.

Donegan

Sun, 04/27/2014 - 6:54pm

I don't like those on the supreme court either Dog. Real constitutional scholars who are judges would have already jailed your god for undermining the constitution.

KURTje

Sun, 04/27/2014 - 2:44pm

How many here have Red Skin?

I

Sun, 04/27/2014 - 3:45pm

Do you? Are you implying that those who don't should "go back where they came from"? If so, do you mean white people, or are you including black people, as well? And if you are including blacks, wouldn't your statement be racist? Or are you just talking about potatoes?

vicariouslyAlive

Mon, 04/28/2014 - 3:56am

... technically... if you're really wanting to split hairs here, secluding any one race from any other race is racism... just because it's not directed towards black people doesn't mean it's not racist... so before someone talks about another talking potatoes, one should try not to sound like a tot.

I

Mon, 04/28/2014 - 10:22am

You obviously missed the intended sarcasm and the reference to red skinned potatoes. You did, however, dole out some great advice about tots, but failed to follow!

vicariouslyAlive

Tue, 04/29/2014 - 3:45am

well, i dream of a world where all potatoes are treated equally. one where the sweets can walk hand in hand with the bakers and not turn heads. a world where whether their insides are white, yellow, orange or even purple, where their outsides can be brown, green, red or even white, all potatoes are treated with equality and need not fear the segregation of color or flavor content. in this world talking ill of anyone potato will be seen as equally sullied, where talking ill about the bakers will be seen as equally absurd, hateful and racist, as speaking ill about the sweets. there potato fan, i think i followed quote well... considering the tater pun, all i was pointing out is it's just as racist to hate white people as it is to hate an other race...

grumpy

Sun, 04/27/2014 - 4:10pm

Personally I live in the real world where the US is a country. Do you live in a fairy tale where the people with "Red Skin" are in control of the country. Are you living in the real world or do you live in a fairy tale country in your mind?

Anyone know if Cruz and/or Bachman have gone through with the plans, or was this just another photo op?

grumpy

Sun, 04/27/2014 - 6:58pm

Yeah some folks know... and some know how to look up the information.

KURTje

Sun, 04/27/2014 - 6:59pm

I - what does my colour matter? That's the real point. How many here knew of family stories of stow-a-ways? How many here remember border states using illegals knowing as cheap labour? For that matter also in the southern states for meat processing? Most forget history quickly.

I

Sun, 04/27/2014 - 8:51pm

It matters because if you don't have "red skin", while living in this country, but suggesting those of any other color should leave, makes you a big fat hypocrite!

pntbutterandjelly

Sun, 04/27/2014 - 7:47pm

With all the above off-article comments....I forget what the article was about now!

KURTje

Sun, 04/27/2014 - 8:11pm

Okay.....Cliven Bundy. That kinda stuff. He said something like "We've been here since 1870"...errr Still he needs to abide by rules.

Ralph J.

Sun, 04/27/2014 - 9:31pm

Why is it that the United States seems to be in a perpetual state of war? Think about it. Why do other nations view the United States as evil? I often think about the ethnic cleansing of Muslims in Bosnia by the Serbs yet Muslim radicals did not go after the Serbs. Think about that too.